Category: The Chief Economist’s Note

In last week’s note I sketched out the costs so far of President Trump’s trade war. In this week’s note I turn my attention to the economic damage it may cause in the future. Three points are worth stressing. The first is that, while the trade dispute between the US and China will ebb and … Continue reading “Hunkering down for a long trade war”

President Trump may have called off his plan to impose tariffs on Mexico, but a deal with China appears to be further away than ever. This raises two questions. First, to what extent has the president’s trade war with China been responsible for recent weakness in global growth? And second, what would a further escalation … Continue reading “Pinning down the costs of the trade war”

This week we are hosting an event in Frankfurt that will explore China’s changing role in the global economy. (If you are interested in attending, register here.) Regular readers will know that, in our view, China’s economy is undergoing a structural slowdown that could see annual GDP growth fall to as low as 2% within … Continue reading “China’s slowdown and what it means for the rest of the world”

Last week we held a series of conferences in North America. You can find recordings of our presentations here. Two recurring questions were asked by clients. The first was how the latest escalation in trade tensions between the US and China was likely to play out. The second was whether, by stepping back from further … Continue reading “Trade, the Fed and why productivity holds the key”

In the carousel of concerns that revolve around financial markets, one that’s particularly close to my heart is the subject of EM debt. Troubles in Turkey and Argentina have meant that concerns about financial stability in emerging economies have resurfaced once again in recent weeks. As usual, the commentary has produced more heat than light. … Continue reading “The changing face of EM debt risks”

Oil has been thrust back into the headlines over the past week following a spike in prices that has taken Brent crude back to around $75pb. As a result, the price of Brent has now risen by 45% from the lows seen at the end of last year. WTI crude is up by nearly 50% … Continue reading “What to make of the latest rise in oil prices”

Another week, and another set of figures that suggest China’s economy has begun to find its feet. Last week’s release of activity data for March showed that, having slowed for the best part of a year, conditions in the world’s second largest economy are now starting to improve. This follows an improvement in March’s trade … Continue reading “China’s other slowdown”

I have been loath to wade into the debate around Brexit in these notes. That’s partly because it has become a sorry and depressing tale of abject political failure on pretty much every side in the UK. But it’s also because (so far at least) the UK economy appears to have shrugged off the latest … Continue reading “A very British farce”

Three pieces of data released last week brought hope that, having slowed for the best part of six months, the world economy may now be starting to stabilise. First came March’s Caixin manufacturing PMI for China, which rebounded to an eight-month high. Then, later in the week, industrial production data from Europe’s manufacturing powerhouse, Germany, … Continue reading “Springtime for the global economy?”

Unless you’ve locked yourself away in a dark room for the past week (and, for UK readers, that would be entirely understandable given the debacle over Brexit), then you’ll have heard plenty of discussion about how bond markets have become increasingly gloomy about the economic outlook. Specifically, yields on long-dated government bonds in the US … Continue reading “Bond markets flash red on the real economy”